Skewed image overshadowing real value of PPI
Before credit crunch 60% of claims were for accident & sickness – not unemployment
Threat of job loss will pass but likelihood of accident & sickness remains constant
Thousands of consumers saved from financial difficulty by AS protection
A MASSIVE 40 per cent* of payment protection insurance claims over the past 12 months have been for accident and sickness, according to independent PPI provider Paymentcare.co.uk.
But borrowers who shun PPI because of the recent negative associations with failed claims for unemployment could be putting themselves squarely in risk’s way.
“The statistics make it quite plain – PPI has protected the financial security of a huge number of borrowers who have lost their income through unpredictable accident or sickness,” said Paymentcare.co.uk MD Shane Craig.
“Before the credit crunch the ratio of AS** claims compared to those for unemployment was 60:40 and when the economy stabilises and job security returns, I expect this pattern to return.
“Borrowers will cease to be so threatened by job loss but the chances of becoming ill or having an accident will remain the same and if they’ve decided not to bother with protection they could find themselves in trouble.”
PPI as a personal finance product has been widely criticised over the past year since the Competition Commission investigation into mis-selling exposed bad practice amongst mainstream providers.
With this coming at the same time as the credit crunch and a huge wave of redundancies, the image of PPI has become seriously distorted.
“This is a false impression that could put borrowers at risk,” said Craig. “The statistics speak for themselves. Protecting yourself against unemployment and redundancy is just one reason to sign up for PPI. Being unable to work because of accident or illness is something that no-one can predict and can be equally financially devastating.”
The most recent figures for annual road accident casualties stands at nearly a quarter of a million